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Reply to "MLB Draft - Signing Bonus"

keewart posted:
Trust In Him posted:
keewart posted:
bacdorslider posted:
4T2 posted:

I would love to have to worry about how it gets taxed...

-42

I used to think the same thing... but when it happens it's no fun

...or when it is not taxed:  no fun.

Son certainly didn't get a multi-million bonus, but what he did get was not taxed at the state level.  I did a quick calculation, printed off a state tax payment coupon, and had to ask son for a HUGE check to cover state taxes.  He was not please.  Oh, to be thrown in to adulthood!  

 

If your son gets in this position deciding where they want to live and become a resident of that state is very important. Can potentially save tens to hundred of thousands $ in state taxes. 

The parents of a college teammate of my son moved to Florida the summer before his Junior year for this very reason.  No state tax in FL.  They wanted to move anyway and took the opportunity to do it.  Saved their 3rd rounder a ton.

However, my husband and I were not about to uproot, change jobs, etc.  Our family is here.   Son can pay the tax.  Later....if he should get a fat paycheck....he can move anywhere he pleases!   I don't think you can claim residency of one state  while you are a college student in a different state.  Maybe only if your parents move?

My understanding is when your jr son gets drafted and decides to turn pro is when he decides where to move to. He will no longer be living with you his parents and all checks, correspondences, bills will be mailed to him there.

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